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Mad Money

News/Business. Money manager Jim Cramer discusses Wall Street investments.

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S&p 8, Us 8, Cramer 6, Brodin 5, Jim 5, Europe 4, Skippy 3, Florida 3, Hain 3, Hp 3, Cisco 3, Ross 2, France 2, U.s. 2, New York 2, Marc Benioff 2, Tamiflu 2, Jim Cramer 1, Manny 1, Sandy 1,
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  CNBC    Mad Money    News/Business. Money manager Jim  
   Cramer discusses Wall Street investments.  

    November 20, 2012
    11:00 - 12:00am EST  

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i'm jim cramer and welcome to my world. you need to get in the game. firms are going to go out of business and he's nuts. they're nuts. they know nothing. i like to say there is a bull market somewhere. "mad money" you can't afford to miss it. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to help you save some money. i'm trying to educate you. call me at 1-800-743-cnbc. don't invest in household names just because they are household. don't speculate in companies because you believe a takeover could occur. these are time-honored mistakes.
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the averages drifted lower before heading higher into the close. the nasdaq gaining 0.02%. much of today's earlier market weakness stemmed from bernanke's gloomy assessment. ♪ [ baby crying ] the chairman said the economy isn't able to handle the tax increases and spending cuts. we know those comments caused the bulk of the intraday pullback. the market was humming along fine. we did in the end rebound nicely. it was a huge victory for the bulls. the losses, regardless of the cliff and it's aftermath, we need to head off the personal portfolio management errors before they cost another dime for us.
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today we got two phenomenal examples of what could go wrong in banking. first we had hewlett-packard. if you are like me, i have both and hp pc and household printer. to finish at $11.71. best buy. the big box retailer, i have not once but twice done in the last six months. closed at $11.96. two household names that you may have been lured into only to have your hopes dashed. two unmitigated disasters. >> the house of pain. >> what went wrong? hewlett-packard was an accounting scandal. best buy was a hideous earnings shortfall.
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both seemed to shock investors. however, if you watch this show, you should never have been in these stocks. or you were betting against them. i told you that these companies were total dogs. this morning the company was acquired for $10 million and this was stunning news. if you own hewlett-packard you were in the crosshairs of two dictums. when you have accounting irregularities you have to sell sell sell. i kept a hand-written note, accounting irregularities equals sell. hewlett-packard has got to be sold. i have to tell you that you should be selling the company for ages. i believe that the culture of the company has been broken for
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a long time. first, hewlett-packard has gone from being an innovator to an assembler and puts them into a machine. so do many other companies and it is going up against apple which is slowly taking share and now that is accelerating. it sells printers, neither the pc nor the printer business is proprietary. it bought gme but now finally tried to crush cisco but it has since vanquished them. notice, it is being crushed in every segment in its business
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and it is down 55% this year. they have a whole new reason not to own it. accounting irregularities. it needs to be sold when you can. how about best buy? here is a stock that has been cut in half during a time of endless rumors that something grand was going to happen. that its founder was going to launch a takeover bid and take the company private. you cannot speculate on takeovers if fundamentals are in decline. they have been declining with terrible sales. i think that it is again not too late to sell sell sell best buy. the simple fact here is that amazon is crushing these guys. we have a huge tv price war. let's step back for a second.
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the tech firmament is littered with household names that have cost you a fortune. we have seen dell, microsoft, intel stagnate and people are hooked on the once great growth engine of the personal computer. the alleged fraud only makes a turnaround that much less likely. remember circuit city? it met its demise not that long ago. both circuit city and radio both circuit city and radio shack were mentioned as takeover candidates. how did that go for you? the fundamentals are in decline.
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a desperate hewlett-packard management purchased the scandal ridden autonomy. [ crying baby ] they have to borrow somebody else's money. so the buyout gets increasingly unlikely. they can't really believe it can be all that bad. but trust me, it can get worse. here is the bottom line, if the fundamentals are declining, don't think they can be turned around by a new person or at all. don't believe that there could be a rescue takeover bid to take you out of your misery. if you don't own best buy or hewlett-packard or any of their ilk take a pass.
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if you do, take advantage of any mess and exit. gordon in maryland. >> booyah jim, how about them ravens? >> they look good. ray lewis is a fan of the show, so get better fast. >> jim, i want your opinion on b&g foods. since they buy companies that are well-known but in financial trouble, do you think hostess might be of interest to them? >> listen skippy, i wanted to buy skippy. we don't want to buy hostess foods. because they have labor issues galore. if they buy skippy that is going to be fabulous. i say buy buy buy bgs. jack in new york. >> ups versus fed dex.
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>> i like the fact that fedex did not pay for an acquisition at the top of the market in europe. fedex should be buy buy buy. evacuate the market? not necessarily. but stay cautious. two examples of what can go wrong, hewlett-packard and best buy. don't be ensnared by cheapness. "mad money" will be right back. >> coming up. technical reversal. hewlett-packard discloses billions of dollars in accounting issues. while some stocks struggle could others still soar? salesforce.com fresh off its earnings. the holidays are approaching and consumers are marching on the malls.
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which stock could help you ring up gains? cramer has his sights set on a retailer that is off the beaten path. bottoming out? there is a lot weighing on this market. fiscal cliff fears. but after weeks of painful retreat, is a turn finally coming? in tonight's edition of off the charts. all coming up on "mad money." don't miss a second of "mad money," follow @jimcramer on twitter, have a question, tweet cramer, #madtweets. send jim an e-mail or give us a call. miss something? head to our website.
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throughout this entire
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throughout this entire period, it's been difficult for the markets. there has been one trend that has been held up the entire time. crm is the symbol. the software is the service player that is the king of the cloud. tech is linked in for the higher price to earnings multiple. being a high flying turbo charged stock can be a real high wire act. the company reported one cent earnings beat off a 32 cent basis with revenues coming in higher. even better the company's deferred revenue, if you go into the website you will see why it is up 41%. let's check in with marc benioff, the visionary ceo, and see where his company is headed. >> jim, great to be with you. thanks for having me today. >> these numbers i know do not
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include the business if hurricane sandy had not hit. >> it was a great quarter. as you can see. $788 million is up 35%. jim, you know we have been on talking about these 30% plus growth quarters, it is an awesome time to deliver a quarter like that. all of these other things and here we are delivering this great number. $1.29 billion is really great. >> how are you with the operating cash flow for this quarter?
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>> well, you can see that we have delivered more than $100 million for the quarter. this is our 5th consecutive quarter with operrating cash flow in excess of $100 million. we are in a market share game. the future of computing is cloud computing, social interfaces and mobile, nothing is getting our customers faster results or delivery. we are absolutely the leader in this area. >> most people are trying to back away from europe. why bother? >> you can see europe had a great quarter.
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these customers in europe are under tremendous duress. they have to turn to vendors like us that can deliver solutions right now. that is why cloud computing always grows at an exaggerated rate during times of distress. when companies can't operate the way they normally do, they are going to go to vendors like us who will deliver this next generation solution for them. >> you had to be blanched today. would you have been able to spot what autonomy was doing wrong? >> i'm not sure that anybody has
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the details to know that. we are making acquisitions not for revenue or market share. we are making acquisitions for two things. next generation technology or two, incredible entrepreneurs that we are bringing into our company. we have done nearly two dozen and some have been great and not as great but in all cases we are getting incredible people and technology and it is positioned to transform our company and a great way to innovate. i don't think that anybody should look at hp today. i think you have to look at acquisitions as a key way to liquidate in your company today. >> are you able to do something
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for hp? it seems like they are deeply challenged after this. >> we are. we have been working closely with the team. you probably heard meg on her call today, called us out as their most successful i.t. implementation. in fact, we have deployed 16,000 users and are working hard to transform their sales and service systems and the way they collaborate and we home that when the story is written and we see the turn around that they will look back as one of the key ways they will achieve massive revenue growth. >> you have been trying to go to $4 billion and then $10 billion. at what point do you think wall street says mark, we need to see the price to earnings multiple not be as rich? however you can do that, but we need to see something in
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earnings. >> at salesforce.com there is no try, only do. just as we have passed that run rate. the reason we have been able to achieve and become the most valuable enterprise software companies is to emphasize on growth. as we get larger, there will be a time when we are willing to mitigate revenue growth but that is not where we are today. we are able to offer these customers this and there are companies that need new systems now. and we have the ability to make
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that happen, but we have taken on an expensive proposition and in the same way, look at that top line growth. >> it is the best of all the companies i have followed. thank you, marc benioff, the yoda-quoting chairman and ceo of sales force.com. >> may the sales force be with you. >> thank you so much. after the break i'm trying to make more money >> the holidays are approaching and consumers are marching on the malls. cramer has his sights set on one
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retailer that is a bit off the beaten path. and later, bottoming out? fiscal cliff fears. a frail recovery. tonight cramer is using the technicals to chart the potential for a move in the market. in tonight's edition of off the charts coming up on "mad money."
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never judge a quarter by the headline numbers. this kind of quick draw mcgraw thinking can lead you to make some terrible mistakes. case in point, urban outfitters. last night the quarter looked disappointing. revenues only in line. the comps were up 1% across all of urban's brands and they seemed pretty darned lousy, which is why they immediately sold the stock. anybody who sold down there is
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feeling like a moron. urban quickly recouped most of its losses. sellers jumped the gun. if they had waited for the conference call, they would have realized that this was a fabulous quarter. they are in phenomenal shape. not only is it perfectly intact, i think it is picking up speed. people didn't know how to read the comps. they saw that store comps were down 1% across the board. they decided the quarter was a debacle. the reason the headline number was bad is because when people buy online and return to a
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store, it counts against the numbers for sales. same store sales actually increased. company also owns anthropologie. spectacular increase. not just because i was there twice this weekend. i actually think the gain is more impressive. this was actually the brand's best result in two years. it's a turnaround. what else? urban's gross margin was up to 37.6% for the quarter thanks to fewer markdowns. on the conference call management said they will be
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less promotional. it makes me think the next quarter will be better than the last one was. you are getting this quarter for free. we have a metric. you know what i call it? i call it the congratulations situation. of the 19 analysts who asked questions, 11 of them gave management a congratulations. a quotient of 57.8%. normally when you get that, the stock will trade higher. but urban is being held back. that caused the stock to crater in initial trading.
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get this, from 2000, 2010 urban rallied over 1000%. the company founder and chairman of the board took the helm back in january. hain knows the brands and customers better than anybody in the world. he wants the job back. in other words the stock has stagnated for the last two years.
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never deviate from character. urban's recovery is a testament to the power of good management. one of the company's three cylinders would be hit at once. the online business seems to be on fire. so many other retailers are saying, no their direct consumer sales are terrific. late september hain laid out this plan for the company's future. his goal is to accelerate the company's growth. putting it in upper echelon of
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retailers that the street loves and he thinks he can grow the online business and expand the assortment to petite sized clothing, yoga and intimate apparel. we know the online plan is working. how about the store growth? hain believes he can hit 200 to 250 stores. along with more than 100 free people locations. he is planning to expand internationally. but they are having good results there. particularly in germany. they are likely to start moving into asia next year. 17.4% growth rate than deliver
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on this turn around. i think the stock will be higher in the 40s the next time i talk about it. when a company reports, do the actual homework, listen to the conference call and make an informed decision. you would have realized that management is executing beautifully and the management is going to buy into weakness instead of heading into the abyss. i'm going to lauren in new york. >> hey jim, i love shopping and with cyber monday coming up do you think ebay could be a good buy? >> i think the stock is still inexpensive. i think the paypal is worth almost the entire price of the company. pat in california, pat.
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>> hi jim, i wanted to ask about ross stores. the earnings keep going up and the stock is going down down down. >> stephanie link sent out an e-mail that we think ross stores is a buy buy buy right here. i think the big froth is out of the stock and they have a lot of places that can open the stores. don't take headlines at face value anymore. dig deeper. urban's turn is for real. when you turn on squawk tomorrow you are going to see this outfit. >> jim goes fast and furious. giving stock after stock their
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final verdict on the lightning round. and later, bottoming out. there is a lot weighing on this market. fiscal cliff fears, a failed recovery. but after weeks of painful retreat, is a turn coming? tonight he is using the technicals in tonight's edition of off the charts, all coming up on "mad money." can i help you? i heard you guys can ship ground for less than the ups store. that's right. i've learned the only way to get a holiday deal is to camp out. you know we've been open all night. is this a trick to get my spot? [ male announcer ] break from the holiday stress. save on ground shipping at fedex office. i am probably going to the gas station
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it is time for the lightning round. buy or sell. are you ready? starting with manny in georgia. >> booyah from the peach state. delta, dal. >> i know, i know, i like all of the press that delta is getting. if you had to own and airline stock i would say yes, but you don't need to own one.
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>> rob in florida. go ahead you are up. i want to give you a big florida state booyah. i want to know about duke energy. >> i think that 5% yield is terrific. let's go to shalandera in ohio. >> i was trying to find out if western union was a buy or sell? >> no, i will tell you why. that was one of the most disturbing conference calls. i had no idea. you can't touch that thing. let's go to art. >> my stock is qihu. reported a terrific quarter
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again yesterday and i wonder what you thought. >> there are a lot of chinese companies that are doing better. buy the fxi. that is what my trust has been buying. we believe that china has been making a major turn. let's go to jeanette in florida. >> i would like to know what you think of amcc. >> way too at the mercy of the big buyers of its technology. that thing blows in the wind of whether the big guys need equipment or not. let's go to michael in virginia. >> cim, what are your thoughts? >> i regard it as unfathomable.
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don't buy. let's go to sal in florida. >> thank you. i have stock that goes up and down. csco. >> listen sunshine, that cisco quarter was terrific. i think you should buy buy buy cisco. ben in texas, ben. >> university of texas booyah to you. >> hook em, what's up? >> graduating senior looking at paa. >> stop looking start buying. that is the stock you have to buy. people feel that may be peace in the mid east. >> this is michael from newport beach. my stock is intel. >> i'm going to say wait for the 4%.
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i don't see why you need to own it. sell it only when it yields back at 4%. that is the conclusion of the lightning round. coming up. bottoming out? there is a lot weighing on this market. fiscal cliff fears, a frail recovery. after weeks of a retreat, is a turn coming? cramer is charting the technicals in tonight's edition of off the charts. scuba diving the great barrier reef with sharks, or jumping into the market, he goes with people he trusts, which is why he trades with a company that doesn't nickel and dime him with hidden fees. so he can worry about other things, like what the market is doing and being ready, no matter what happens,
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was yesterday's rally for real? have we finally made it out of the house of pain? is it an oversold bounce? isn't that the big question in this market?
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tonight we go off the charts with a brilliant technician who also happens to be my colleague and called the top at the s&p 500 at 1476. so as far as we're concerned she has some serious street cred when it comes to predicting the market. she said that if the s&p 500 dropped below 1396 all bets were off. that is what happened. this market has absolutely been miserable and it has been a horror show. so the question is, is this another opportunity for you to take some profits before we head back down. she thinks it was important. i'm going to show you why, i want you to take a look at this
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daily chart of the s&p 500. when it made its latest low on friday, it did so near some very important levels in terms of price and time. she's the fibonacci queen, meaning the medieval mathematician, here are the numbers, 23.6% and 61.8%. as it turns out, not only do they repeat in nature, but these ratios also show up in the charts as key turning points. as you can see from this chart, when the s&p bottomed on friday, it did so right near two key price levels, there was a 61.8% retracement from the june 4th
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lows to the peak, which created a floor at 1346. and there was a projection to the november 2011 low which put in a second floor at 1340. they actually do work. okay, the fact that the s&p bottomed right near these levels makes him think that this could be an important low. they call them clusters, it could mean that the trend is about to change. and that would be a very good thing. the same analysis that brodin just did can be applied to the time axis. it is too coincidental, 43 trading days from high to low. when you look at these charts you will see that big declines or advances will often last for
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the same number of days before petering out. it does happen, when brodin sees that it was 43 days, trading days from september 14th high, that is what we are looking for, that is the big deal. it could mean that the decline has at last run its course. it can't just be coincidence. there is another issue here. if you look at the rally from june 4th, to september 14th. you have to go from here to here now. you multiply how long this current decline has lasted. all of this time and price stuff tells brodin it should be pivotal. if we continue to hold above these levels, she could see the s&p going to 8.8% above where we are right now.
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we did take out her initial line in the sand and we get to rally back above that level. check out the second chart to see all the obstacles that stand in the way of that gain. the s&p is three ceilings of resistance that could start to clear those levels. we have the ceiling created by the highs. right before the election. let's call that the romney rally which creates a thick wall of resistance to 1450. if we beat the pre-election highs, then there is still one last barrier even though it
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broke down after the election. every time it would rally, the move would peter out. right now we are out in the same area and then start giving up ground. to get over the symmetry problem the s&p needs to close over 1391 and needs to do it real fast. even though brodin has a constantly positive attitude, the new line in the sand is the november 16th line of 1346. here is the bottom line. based on the reading of the charts, brodin things yesterday's rally was not a flash in the pan. her chart suggests it was perhaps a real bottom. if we go over the fiscal cliff,
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things are going to get bad. it is good to have the charts or her reading of the charts on the bull side again. "mad money" is back after the break. sometimes what we suffer from is bigger than we think ... like the flu. with aches, fever and chills- the flu's a really big deal. so why treat it like it's a little cold? there's something that works differently than over-the-counter remedies. prescription tamiflu attacks the flu virus at its source. so don't wait. call your doctor right away. tamiflu is prescription medicine for treating the flu
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what really matters? i don't know. does a french sovereign bond rating downgrade matter? that would send us down here. somehow our financials would get
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hit heavily off of french bonds. we would be focused on the prospects of soc gen to make it through this crisis. it would be the cause for major hand wringing on how france is going into a recession. it would be a prelude to armageddon. the kind of gains you would expect on an upgrade.
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second, the ratings agencies, they don't have the clout they used to. in the end, it doesn't change much if your nation has a chance to stay solvent. as france will do the best that it will. consider that our national debt went down last year. we will probably get downgraded again here. but it will be a so-what event. nobody is going to sell u.s. bonds this time. we don't have that kind of demand. at least when it comes to spillover to here, many of those have drastically cut their exposure. companies are cutting back.
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it has been working. finally the sheer length of time that this crisis has unfolded, it makes everything more easily dealt with. last year i was arguing for a kick the can strategy. a lot of the traditional thinking has got us there. if it does sink us into the oblivion is there. it has not been lost just diluted.
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they got their heads guillotined at has been the way of the french when they exact revenge. stick with cramer. this is america. we don't let frequent heartburn come between us and what we love. so if you're one of them people who gets heartburn
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